198 . Thailand Introduction Our Location Offer Thailand enjoys a strategic location and serves as a gateway into the heart of Asia - home to what is today the largest growing economic market. *Convenient trade with China, India and the countries of the Association of Southeast Asian Nations (ASEAN), and easy access into the Greater Mekong sub-region, where newly emerging markets offer great business potential. *Close economic cooperation with other ASEAN member nations, and Thai manufactured products and services have access to their markets, which includes all 10 ASEAN countries. ASEAN is home to more than half a billion people, GDP in excess of US$1.5 trillion and total trade of well more than US$1 trillion per year. *Well-defined investment policies focus on liberalization and encourage free trade. Foreign investments, especially those that contribute to the development of skills, technology and innovation are actively promoted by the government. *Thailand consistently ranks among the most attractive investment locations in international surveys, and the World Bank's 2010 Ease of Doing Business report places Thailand as the 12th easiest country in the world in which to do business. *The Board of Investment offers a range of tax incentives, support services and import duty exemptions or reductions to an extensive list of promoted activities. *The Board of Investment coordinates the activities of the One-Stop Service Center for Visas and Work Permits, which enables foreign staff of BOI-promoted companies to obtain work permits and long-term visas within three hours or less. Additionally, set up the One Start One Stop Investment Center to facilitate a full range of services and streamline investment procedures by bringing representatives from more than 20 government agencies under one roof. Introduction to investment regime To relieve the fiscal burden of the government and to respond to current and future economic situations, the Board of Investment (BOI) prescribes policies for investment promotion as follows: 1. Privileges will be granted to projects that actually benefit the economy, and good governance will be used to manager and supervise the application of tax and duty privileges. Promoted entities will report the operating results of their promoted projects to the BOI for review prior to the application of tax and duty privileges for that year. 2. To promote development of quality and production standards that will enhance Thailand's competitiveness in the world market, every promoted project that has investment capital of 10 million bath or more (excluding cost of land and working capital) must obtain ISO 9000 certification or similar international certification. 3. Previous conditions on exports and use of local materials have been repealed, making the criteria for promotion in line with international trade and investment agreements. 4. Special investment promotion will be given to regions or areas with low income and inadequate investment facilities. Maximum tax and duty privileges will be given to these regions or areas. 5. Priority is given to small and medium-sized industries by applying a minimum level of investment capital of 500,000 baht (excluding cost of land and working capital) for activities, as per BOI announcement No. 1/2553, and of not less than one million baht (excluding cost of land and working capital) for other activities. 6. Priority is given to agricultural activities and agricultural products, projects related to technological and human resource development, public utilities, infrastructure and basic services, environmental protection and conservation and targeted industries. Investment priority plan/equivalent policy 199 . Thailand Thailand aims to gear the country towards sustainable development. Studies will be conducted in order to launch investment promotion measures that contribute to the country's development in economic, social and environmental development, as well as transition the industrial sector into becoming knowledge-based and value-added. Thailand Board of Investment will start working with related organizations to develop investment policies for sustainable development. It also review measures that expired of the end of last year which are in line with this direction, such as Thailand Investment Year 2008-2009, to improve efficiency of production processes and measures to solve environmental problems. In addition, the details of new investment promotion measures will be studied in order to develop human resources to support knowledge-based industries, to build strength in science and technology, to promote environmental and community friendly investment, such as Eco Town or Eco Industrial Estate, and finally to build industry and services on cultural uniqueness and value-added creativity. More information Office of the Board of Investment: www.boi.go.th Regulation of foreign investment Process for foreign entities/nationals to invest in our economy The process for foreign entities/nations to invest in your economy There are several choices of business organization recognized under Thai Law ranging from sole proprietorship, partnership, private company, and public limited company. Hence, private limited Company, Branches of Foreign Companies, Representative Office of Foreign Companies, and Regional Operating Head Quarter are among the most popular form of organization of Foreign Entities. Please see business guide to Thailand for more information. www.boi.go.th/english/download/faq/Bizzg.pdf Generally there are two main procedures to start up a business in Thailand for private limited company. One is for general procedure; the other is the special procedure in order to obtain the special privilege under Investment Promotion Act (in short to obtain BOI promoted incentives). The two procedures can be processed at the parallel timeline. General Procedure to start up company limited 1.Registration of the company at Minister of Commerce This procedure will require a minimum of 3 promoters for private limited company and the promoter must be individual (not business entities). The registering of the company occurs at the MOC can be accomplished on the same day as the registration of the memorandum of association (subject to full compliance with the required procedures). If the company falls under the definition of "foreign" (as defined in the Foreign Business Act), it will normally require to obtain Cabinet approval or a Foreign Business License prior to commencing operation. However, the BOI Promoted Company normally can use the BOI document to obtain the Foreign Business Certificate. The process of the registration is consisting of (1) Corporate Name Reservation (2) Filling a Memorandum of Association-to define the share structure (3) Convening a Statutory Meeting -when the minimum 25 percent of the par value of each subscribed share must be paid. (4) Registration within the 3 months of the date of the statutory meeting, the directors must submit the application to establish the company. (5) Registering for Tax Documents 2.Accounting and Financial Report Requirements The companies must keep books and follow accounting procedures specified in the Civil and commercial code, the Revenue Code and the Accounts Act. The basic accounting principles practiced in the United States are accepted in Thailand as are accounting methods and conventions sanctioned by Law. 3.Industrial Licensing and Regulation 200 . Thailand The companies wish to established a factor in Thailand has to comply with the Factory Act 1969 (amended in 1972,1975,1979, and 1992) and a factory or any premise that uses machinery equivalent to five horsepower or more, or that employs seven or more workers for manufacturing, producing, assembling, packing, repairing, maintaining, testing, improving, processing, conveying, storing or destroying anything included in the classes or types of factories presently listed in the Ministerial Regulations. A factory license issued by the department of Industrial works, Ministry of Industry -see www.diw.go.th If the premise is required to obtain the notification or license, this must be obtain prior to the construction of a factory. After the construction is completed and prior to the commencement of operations, the operator must inform the official at least 15 days in advance. For environmental purpose, some of the factory has to conduct an Environment Impact Assessment-see www.onep.go.th 4.The other applications, that should be considered depending on the type of business, are patent, trademark and some specific industry regulation (explain in the following question) 5.The Land Act in Thailand. In order to obtain the land, the foreign entities can use the channel through BOI or IEAT to obtain the right to own land for their business. Apart from that, all has to comply by the Land Act. 6.Foreign Worker in Thailand Foreigner works in Thailand must obtain work permits from the Foreigner's Occupation Control Division of the Department of Skill Development or the One-Stop Service Center for the visa and work permit (for BOI promoted mainly). Reports on all changes in employment of foreigners must be filed by the employers with the Department of Skill Development. The procedure to apply for BOI promotion incentives: Thailand Board of Investment has offered a wide range of incentives for Business Start-up in Thailand for both Thai Nationality and Foreigner under the same national treatment basic. For more information on the BOI rules and regulation, please visit the www.boi.go.th and